Washington Insider -- Friday

Disaster Relief Caught in Controversy

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Trump Appears to Back Away From Threat to Close Border

President Donald Trump appears to be backing away from his threat to close the U.S. border with Mexico, saying that option still could be deployed, but not for a while.

Trump said that he would give Mexico a "one-year warning" to stop the flow of drugs into the United States and that he would probably first impose tariffs on autos coming in.

"The only thing frankly better, but less drastic than closing the border, is to tariff the cars coming in," Trump told reporters. "We're going to give them a one-year warning and if the drugs don't stop or largely stop, we'll put tariffs on Mexico and products, in particular cars."

In later comments Trump said that the possibility of closing the border was even more remote.

"Before we close the border, we'll put the tariffs on the cars," Trump told reporters. "I don't think we'll ever have to close the border."

Trump's reversal on the issue likely reflects efforts by lawmakers, agriculture and business interests and top White House officials all who have expressed alarm and related the potential economic impacts that would accompany such a border closing.


Brazil Meat Company Official Sees More US Pork to China

African swine fever (ASF) in China is a "transformational event" and puts the U.S. and Brazil in line to boost its exports of pork to China, according to BRF CEO Pedro Parente.

However, the rise in Brazilian exports would in part depend on more Brazilian pork plants getting certified to ship pork to China, he noted, detailing that BRF only has one unit able to sell pork to China right now. But, Brazilian companies could ship an additional 200,000 to 300,000 metric tons of pork annually to China, he told a conference in Sao Paulo.

He predicted the U.S. could see its shipments rise by some 700,000 mt. Those figures are small given China's annual pork demand of around 56 million mt against production of 54 million mt.

A 10% drop in Chinese production, a conservative estimate, would create a need for an additional 5.5 million mt, he said.


Washington Insider: Disaster Relief Caught in Controversy

Disaster relief is typically non-political since both parties face damages when disasters strike. However, The Hill is reporting this week that Senate Majority Leader Mitch McConnell, R-Ky., is being squeezed between President Trump and anxious members of his Republican conference on a disaster relief bill that has stalled over the charged issue of assistance for Puerto Rico.

The president spent part of a meeting last week with Senate Republicans railing against what he sees as Puerto Rico's push for more than its fair share of disaster relief money and made it clear to GOP leaders that he opposes sending more money to the storm-ravaged island. He accused Puerto Rico of "sucking needed resources away from other states."

Democrats, however, won't let other Republican-drafted disaster relief bills pass without extra money for Puerto Rico and know they have leverage because some of the states in most dire need of relief — Georgia, Iowa, Florida and Nebraska — have all-Republican Senate delegations.

One GOP-backed relief bill includes more than $3 billion for crop losses in these agriculture-heavy states and includes special language to help pecan growers in Georgia who are pleading for immediate federal help.

Sen. Johnny Isakson, R-Ga., said he pressed McConnell directly to get the bill passed as soon as possible and warned if help doesn't get to Georgia in 10 days, "some of the farmers are going to lose their farms or go into serious debt because the banks can't wait on them any longer to pay off their debts."

McConnell is in a tough spot, The Hill says. The most likely way to get disaster relief to Georgia and other states this month would be to cut a deal with Democrats to increase assistance for Puerto Rico. But doing so would be seen as undercutting Trump. McConnell, who faces reelection in 2020, has one of the lowest home-state approval ratings of any senator and needs the president's support.

A Republican member of the Senate Appropriations Committee said colleagues from states that have suffered devastating crop losses are getting nervous as the fight over Puerto Rico threatens to drag out for weeks.

"There's a lot of money in the disaster relief budget right now but the Georgia, Nebraska and Iowa folks are extremely concerned," said the lawmaker, who requested anonymity.

McConnell said earlier this week that he will continue to negotiate because "no action is not an option."

A senior Republican aide told The Hill that the pressure is on Senate Minority Leader Charles Schumer, D-N.Y., to explain why Democrats are holding up a bill that Trump has said he would sign into law. The aide noted it includes $600 million in nutrition assistance for Puerto Rico. Democrats, however, argue that's grossly inadequate.

"We understand the devastation in Puerto Rico and there are no excuses left. It's just to say we're not going to help them, we'll help other victims," said Senate Minority Whip Dick Durbin, D-Ill.

"Make no mistake — we reached this impasse because the president has said for himself he opposes help for Puerto Rico. And Republicans follow along," Schumer said on the Senate floor.

He and Sen. Patrick Leahy., D-Vt., the top-ranking Democrat on the Appropriations Committee, offered an amendment Tuesday that would have increased funding for Midwestern farm states as well as for Puerto Rico.

Senate Appropriations Committee Chairman Richard Shelby, R-Ala., who is centrally involved in the talks, initially told reporters that he thought bolstering funds for damage caused by tornadoes in the Southeast and flooding in the Midwest would be the key to getting a deal. But White House officials later told him that the proposal would not fly because the president is staunchly opposed to more money for Puerto Rico.

He said the negotiations are now "stalled" and that the president "hasn't yet" agreed to any more money for Puerto Rico.

Republicans warn that Democrats running for president will pay a political price if they continue to support the Democratic blockade of the GOP's disaster relief bill because Iowa, the nation's first caucus state in 2020, would be a major beneficiary.

The attempt to pressure Democrats running for the White House, however, doesn't appear to be having much effect, The Hill said. "All of them voted Monday against the Republican disaster relief package."

"I worry about [Republicans] trying to pit one American against another. I don't think the political games we're seeing right now are becoming of a nation," said Sen. Cory Booker, D-N.J., a White House hopeful.

The impacts of weather disasters are plain for all to see in many parts of the country, so fighting over "needs" in one area versus another seems risky, especially if disaster tolls increase as the season advances. These are high-stakes fights producers should watch closely, Washington Insider believes.


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